An economist from the Faculty of Economics and Business at Gadjah\nMada University (UGM), Rimawan Pradiptyo, has raised concerns regarding\nthe signing of an Agreement on Reciprocal Trade (ART) between Indonesia\nand the United States. He contends the agreement is unbalanced, with\nIndonesia bearing the greatest burden whilst the United States obtains\nmost of the benefits.<\/p>\n
\u201cThis is the first time in my career dealing with an agreement like\nthis, or rather a decision that violates the preamble of the 1945\nConstitution,\u201d Rimawan stated during a national seminar held online via\nZoom on Saturday, 14 March 2026.<\/p>\n
Rimawan believes that if the ART takes effect, Indonesia risks\nencountering problems with other nations. One possibility is legal\naction through the World Trade Organization (WTO). Additionally, other\ncountries could retaliate or take retaliatory measures, viewing\nIndonesia as granting special treatment to the United States.<\/p>\n
He revealed that the trade agreement contains three clauses\nprotecting the US position, whilst Indonesia lacks comparable protective\nclauses. This situation, according to him, could lead to legal problems,\nincluding potential violations of Articles 5 and 11 and the preamble of\nthe 1945 Constitution.<\/p>\n
Rimawan believes implementing the reciprocal trade tariff agreement\ncould require the government to adjust numerous domestic regulations.\nSuch adjustments, he noted, could encompass changes or creation of new\nregulations at various levels, ranging from legislation to government\nregulations, presidential decisions, financial services authority\nregulations, central bank regulations, and ministerial regulations.<\/p>\n
During the discussion, Rimawan acknowledged difficulty in\ntheoretically modelling the policy\u2019s impact. He contends that ART\nprovisions requiring Indonesia to open employment and investment\nopportunities in the United States are difficult to explain using\nstandard economic models.<\/p>\n
He also questioned provisions stating the Indonesian government must\nfacilitate domestic companies to purchase goods from the United States.\nAccording to Rimawan, purchasing decisions are typically determined by\ncompany needs and capability. If a company does not require such goods,\nthe question arises whether the state would still face sanctions.<\/p>\n
Regarding the threat of additional tariffs up to 10 percent in the\nreciprocal trade agreement, he stated this places Indonesia in an\nincreasingly difficult position. Each implementation stage of the\nagreement potentially carries sanctions threats if requirements are not\nmet.<\/p>\n
Furthermore, Rimawan perceives the relationship pattern in the ART\ncould compel Indonesia to follow US trade policies. In other words, if\nthe United States implements specific trade policies against other\nnations, Indonesia might be pressured to take similar action even if\npreviously having no conflict with those countries.<\/p>\n
According to Rimawan, such a situation could also provoke reactions\nfrom other nations, viewing Indonesia as granting privileges to the\nUnited States. He emphasised this risk requires attention given\nIndonesia\u2019s position as a small open economy, which is more vulnerable\nto external pressures than large nations such as the United States.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesia-us-trade-agreement-poses-risk-of-retaliation-1773553949", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }